Leadership ability doesn't always correlate with the formal hierarchy. Moreover, top-down leadership appointments can produce unwanted side effects--like too much energy being expended in managing up. The challenge: find and empower the "natural" leaders within your organization. The solution: Develop a dynamic system for measuring an individual’s “natural leadership”—that is, the extent to which their contributions are seen as valuable, both inside and outside of an organization, and publish these results for all to see.

Problem

Problem in brief: In most organizations, far too much power (be it control of resources, decision-making authority, access to key information, or ability to reward and sanction other individuals) is linked to positional (rather than earned, or natural) authority, simply because natural leadership has heretofore been a difficult commodity to measure. While a fixed chain of command may be efficient, by reducing the need for consensus-building, it can have some nasty side-effects. Top-down authority structures turn employees into bootlickers, breed pointless struggles for political advantage, and discourage dissent. Their inherent inflexibility can also lead to persistent misalignments between positional power and genuine leadership ability—lags that can ultimately destroy a great organization. Review the medical history of a chronically struggling company—such as Chrysler, Sony or Motorola—and you’ll find a management model that concentrated too much power in the hands of deadwood executives, and awarded too little power to the natural leaders who might have had the energy and vision to set the company on a new course. The need to empower natural leaders isn’t an HR pipedream, it’s a competitive imperative. But before you can empower them, you have to find them. In most companies, the formal hierarchy is a matter of public record—it’s easy to discover who’s in charge of what. By contrast, natural leaders don’t appear on any organization chart.

Solution

To identify the natural leaders you need to know . . . Whose advice is sought most often on any particular topic? Who responds most promptly to requests from peers? Whose responses are judged most helpful? Who is most likely to reach across organizational boundaries to aid a colleague? Whose opinions are most valued, internally and externally? Who gets the most kudos from customers? Who’s the most densely connected to other employees? Who’s generating the most buzz outside the company? Who consistently demonstrates real thought leadership? Who seems truly critical to key decisions? A lot of the data you need to answer these questions is lurking in the weeds of your company’s e-mail system, or can be found on the Web. Nevertheless, it will take some creative effort and software tweaks to ferret it out. A few suggestions . . .  Establish a directory of key words corresponding to critical skills and competencies within your company, and then see who generates or receives the most e-mails on any particular topic.  Add a small box at the end of every incoming e-mail that let’s the recipient grade the sender’s response: was it timely, was it helpful?  Analyze internal e-mail flows to see which folks are most likely to respond positively to emails from colleagues in other divisions—who’s collaborating across unit boundaries?  Create a system for ranking the frequency and value of each employee’s contributions to internal wikis or communities of practice.  Encourage employees to write internal blogs, and to rank posts and comments.  Using key words, analyze company emails to see who’s had the most to say about important corporate decisions, and to see how widely those views have been disseminated and discussed.  Identify e-mails relating to key projects and then identify the individuals who were the most critical “nodes” in the project team—the folks who seemed to be in the middle of every e-mail exchange.  Review incoming emails from customers to determine who’s getting the most requests for help, who’s been most responsive, and who’s receiving the most praise, or give customers the ability to immediately score the email responses they get from company personnel.  Use Google Alert, Linked In and other sources to find out which employees are getting quoted most often online, and who’s showing up most often in the press. There are other types of data that might also be useful—but you get the idea. Sure, there are some practical challenges in collecting and analyzing this sorts of data. But ultimately, it should be possible for a company to create a multivariate leadership score for every employee.

Practical Impact

The impacts of such a dynamic reputational capital system would be multi-fold – amongst other benefits, such a system would: • Recognize and reward the valuable (but often unheralded) contributions of individuals who are currently handicapped by a lack of positional authority • Provide a behavioral assessment tool for those who possess positional authority, allowing them to determine the extent to which their authority and power stems from their title, rather than the value of their contributions to the organization • Serve as a valuable input to the performance assessment process

First Steps

• Develop series of communications explaining the concept to the employee base and launch a blog (with initial posting coming from a member of senior leadership) introducing the concept and collecting feedback relative to the concept • Implement a simple e-mail review system (rating the timeliness and helpfulness of email responses); perform sanity check by measuring the relative leadership score earned by known high-performers within the organization.

Credits

Thanks to Polly Labarre for some very helpful builds and elaborations!!

In addition, also aiming to improve the MIX building, how would you manage the implementation or effectiveness of your hack? Have you thought about any quantitative or qualitative key performance indicator (KPI)?

Empower, hierarchy, energy and power are key words of your hack. Sony, Motorola, Chrysler, GM, .... went into decline because they did not manage these word well. You have suggested a way to emerge the people who can handle them based on the conversations that take place. Perhaps the management of conversations can be advanced to constructively channel the driving forces of the enterprise. It is even possible that the rapid growth of interactions makes this an imperative. I have in fact argued in my barrier http://www.managementexchange.com/barrier/change-within-citadel-must-be-... that it is not sufficient to empower or even know the way to execute successfully. The means must exist.

All that you have specified for successful empowerment and the pursuit of success is delivered by my harnessing of technology and that too without dependence upon personnel for adoption. My creation of a single process for all Knowledge interactions makes the means compelling. It converts IT from a tool to a source of inexhaustible and driving 'intelligent energy' for something far more than data creation. Natural and reliable Feedback on each decision event is assured. The collective thought becomes the leader. The hierarchy exists to mentor the personnel and protect the process.

The Barrier I have recommended will serve as a good starting point to my barriers and hacks which fill in the details. I hope you will find the time to look into this harnessing of immense energy to realize your thinking and I can look forward to some healthy disbelief!

My question though is more directed towards the assumption behind it; Is a natural leader some form of an organizational super-person? If yes, then i think by doing so we discount the reality within many organizations that different leaders have different strengths. For example; one leader could be very good in building, aligning and inspiring their teams to perform in an extra-ordinary manner with clients (the external factor you highlighted in your set of questions) while they are not personally well known to the client.

If we used your process in this example, such a leader would immediately fall off the radar!
If not, then please disregard my comment.

My second comment is very related (maybe ever repetition of Matt's), what if this natural leader is just
a people's person?however, isn't as strong in developing a purpose for the team for example. would your process still consider him as a natural leader?

This is a fascinating area. In the late 90's I used a visual analysis tool called Netmap to look at internal phone records - and identify the real communication channels in an organisation. The supplier - Netmap Analytics - is still involved with this although I think their primary goal is finding criminals rather than business leaders! In organized crime investigations, investigators piece together a criminal organisations' structure (which is usually not documented) based on all sorts of evidence. Many of these techniques and tools could be applied to identifying natural leaders engaged in more legal pursuits.

Matt's question about extroverts below also came to mind - in my call analysis example above, many of the calls would have been purely social (and may or may not have had business benefit).

A related question is whether this kind of analysis would tend to identify popular leaders, rather than leaders who are good for the organisation in the long term. (a few populist politicians spring to mind) Sometimes a brilliant leader is only identified as such by history which proves their unconventional or unpopular wisdom correct.

1. I wonder how many "leaders" your leader meter would identify who aren't really leaders but are simply extroverts? Or can we safely assume that these things can sometimes be synonymous?

2. Do you think this strategy will solve leadership problems you've outlined? You are essentially proposing a different methodology for selecting leaders, but you are not proposing to remove leadership as a concept. It sounds like some of the problems you listed will remain in the firm for as long as you have leaders.

I have an idea to toss into the ring here, as an addition to the many good insights already out there. What if the feedbacks consisted more of checklists of sorts negotiated at the time of hire and filled in by employees, not by their reports. The feedbacks would be based on a quantitative component (yes or no) to each item. Then, if staff answers yes -- they would detail evidence of this trait in their work - in a tweet sized proof. Only now - does the report weigh in on the evidence of innovations listed in their checkpoints.

Would that help to change the balance from "position" to talent development? Would it increase innovation in your dynamic configuration here?

Gary, consider incorporating a social media tool such as the one I have been designing for a similar purpose:

A microblogging widget that captures business intelligence about users' ability to believe information:

Decision Support Widget: A tool that helps users validate information by asking structured questions in the form "Is it true that…?" sent via microblogging, instant messaging, SMS or e-mail to people they trust to validate it. - Hence, the people they choose to follow (namely, prospective leaders).

Business Intelligence: Tracks communications between individuals inside and outside the organization, identifying what employees and business ecosystem participants are having difficulty believing and who they are relying on for validation. - Hence, identify the emerging leaders in various areas.

I believe your central purpose is to find a way to identify natural leaders, no? Please do correct me if I am off.

I have two builds for this great idea.

First, I propose an additional method to achieve your purpose. In some of the organizations that we work with, important decisions are not necessarily made over email or on a wiki (though many do use wikis). Often they are made "live" in teams that meet in person or over video. So although monitoring the wiki and email trail is necessary, there are additional ways to collect information about who has natural abilities and for what. So in our work at TANDBERG, recently acquired by Cisco, we took methods and lessons from the field of cultural anthropology. We got on the ground and simply talked to people. We find that everyone is ready and willing to tell us who is good at what and why, who they appreciate and why. Using these additional methods also helps us to qualify the information gathered through a wiki (it can help us make subtler distinctions, such as, who is a fantastic mentor, and who is simply just extroverted).

The next build may already be intrinsic to what you propose, I can’t quite tell from the outline, so if you are already thinking this way, just ignore this. We spend a good deal of time establishing a context for "natural ability". Although there may be a number of qualities that are intrinsic to good leaders (empowering team members, igniting the innovative spirit, etc.), those definitions in and of themselves do not necessarily answer the question, to what end? So at TANDBERG we spent a good deal of time (with the Chief Cultural Officer) with teams on the ground trying to understand the business goals and challenges they were facing (as they should absolutely change over time). And understanding which phase of the organizational life cycle they were/are in (e.g., start up or old timer?) Once these answers were clear to everyone involved, it became easier for them to define what kind of culture they themselves wanted and needed to achieve their business goals. Those goals, that culture, give context to the natural abilities that everyone can be on the lookout for. Then, over time, we get a somewhat nuanced and “matrixed” profile on any given person… for example, who displays natural innovative ability in this context?

And of course the entire process engaged everyone in rightfully defining their own culture—and the abilities needed to thrive in it—rather than us defining it for them… empowering indeed. I think this is why TANDBERG was voted Best Place to Work in Norway for the last two years by Great Place to Work. Of course it is a great place to work. They made it so.

A key facet of leadership that the old top down hierarchy is supposed to be taking into account is the exposure to various problem situations/challenges (of different magnitudes) that a person has faced and managed. This is one reason why we do not find (very often) top leadership for say a consumer products MNC being sourced from say, an NGO (irrespective of the leadership ability of the person), and maybe for good reason.
This is relevant when companies need to decide how to use the leadership score data. A major incentive could be the delegation of key challenges/decisions to top scorers in this system, that further strengthens his/her claim to leadership.

One of my first management lessons came from my Dad when as a new graduate I went to work at the mill where he was a foreman. I didn't fully understand it at the time but things happened to reinforce his wisdom which was "understand the difference between rank and authority". He added that rank is a title given by your boss whereas authority is earned from, and lent by those who are working with and for you. It became apparent that rank meant little without authority which takes a long time to earn and an instant to lose. The key to earning authority from others is to show that you are prepared to listen, not just hear others. The followup is where you look for opportunities to add value to the work environment. Adding value will remove constraints, add knowledge, share credit and enable others to grow. From these seeds do leaders grow.